Prior to joining Federal-Mogul in 2010, Paul Johnson was general director of ACDelco. During his career with General Motors, he held positions of increasing responsibility in aftersales, product management, business development and finance. He earned a bachelor’s degree in Aeronautical and Astronautical Engineering from Purdue University and an M.B.A. from the University of Michigan.
Many shop owners experienced strong sales in 2011. Do you expect the aftermarket to continue to grow this year? What factors, if any, are cause for concern?
It was a good year for the aftermarket, as consumers continued to see the value of investing in quality parts and services for their existing vehicles. Perhaps most promising has been our ability to attract the owners of foreign nameplate vehicles, millions of which are coming off their factory warranties. The growth of the foreign nameplate category and strong consumer satisfaction with the convenience, quality and bottom-line value provided by the independent aftermarket should help the industry in 2012. Rising fuel prices are a concern because they motivate consumers to drive less, but hopefully this will be offset by a decline in the unemployment rate. Most other key contributors to aftermarket growth — the aging vehicle fleet, a general shift away from dealership-based parts and service, consumers’ trust in independent service providers, and the continued strength of leading brands and globally focused manufacturers like Federal-Mogul — are very positive.
How has the recession changed the independent shop owner’s approach to selecting parts for his or her customers’ vehicles? Has it made leading brands like Wagner, MOOG, Fel-Pro, Champion, ANCO and others more or less important in today’s market?
Successful shop owners always understand the economic realities facing their customers. They also recognize that millions of consumers – many for the first time – are turning to the independent aftermarket to help maximize the reliability and service life of their vehicles. One new customer might be driving a four-year-old car in need of brakes, chassis parts or spark plugs, and the next might be looking for a way to keep a 12-year-old Camry on the road for another year or two.
In each case, the shop owner wants to earn that customer’s trust and continued business, and to do that he or she needs to install high quality replacement parts engineered specifically for that vehicle. The owner of the newer vehicle will undoubtedly be more inclined to pay for premium parts that will restore
like-new performance and reliability. But the owner of the older vehicle also expects the best overall value, which includes proven product quality from a reputable manufacturer. Shop owners can grow their businesses by serving both of these customers, but their ability to earn this business depends on the products and brands they specify. This is why quality-driven brands like MOOG, Fel-Pro, Champion, Wagner and ANCO continue to grow.
There’s certainly no shortage of low-cost alternatives in most product categories, from brake pads to chassis parts to wiper blades. How does a leading manufacturer maintain the strength of its high-quality, branded products in an increasingly price-driven market?
We focus on offering the best maintenance or repair option for every customer, regardless of the age and condition of the vehicle. A very price-sensitive customer who needs a new control arm for an older vehicle isn’t going to be well served by an off-brand part offered by an unknown manufacturer. That’s why we recently expanded our MOOG line to include mid-range “R-Series” control arms, each of which meets our strict quality standards. For the larger market of consumers who want the best part their vehicles, our premium MOOG control arms, ball joints, tie rod ends and other components are clearly the right choice. The same is true across other categories — in wipers, our research identified a sizeable market of consumers who want to upgrade to the latest flat-blade technology but aren’t inclined to pay for a premium part. Our new ANCO Profile blades enable shops to tap into this market.
Can you give us an example of how one of your leading brands is evolving to meet the changing needs of today’s shop professionals?
MOOG is a perfect example. It was built around the value of premium, “problem solving” performance — products that improve on the original designs to provide superior performance, longer service life and easier installation. Multiple generations of shop professionals have chosen MOOG over all other brands. Now we have applied our stringent engineering standards to new mid-range R-Series control arms to help shops close more business with customers who want to reduce the cost of the repair. We’ve also extended the MOOG product range to include high quality complete strut assemblies, premium wheel hub assemblies and universal joints so shops can rely on one trusted brand for more repairs.
We’ve taken the same approach with the Champion brand, which now includes not only spark plugs but also oil, air and cabin air filters and performance chemical additives.
Every shop owner is looking to grow – those that traditionally serviced only domestic vehicles are now servicing all nameplates. Is a brand like Wagner Brake, MOOG or Champion as relevant in the foreign-nameplate category as it is for domestics?
Just take a look at our product-line expansions over the past several years and you’ll see that Wagner Brake, MOOG, Champion, Fel-Pro and every other Federal-Mogul brand offers outstanding coverage of the foreign nameplate market. We have made these investments to ensure that service professionals have all of the high quality parts they need to capture the business of the millions of import owners who are now turning to the independent aftermarket. But our advantage is much more than simply offering the right coverage — each of our brands calls upon Federal-Mogul’s global network of advanced technology centers to identify and deliver the best designs for every application. Because we are the OE supplier of choice to several global automakers, we have unique insight to the performance demands of today’s models, and we address these demands in every product we offer.
It sounds like OE technology – or at least extensive experience as a global OE manufacturer – is almost a requirement for a parts manufacturer today.
Our OE expertise is a huge differentiator for our business. Just look at the engine sealing category: We recently enhanced our market-leading line of Fel-Pro PermaTorque MLS head gaskets with a new technology called LaserWeld. This feature, which helps strengthen the combustion seal for today’s higher output, higher temperature engines, was developed by our OE sealing engineers in Burscheid, Germany. We validated the design through our extensive NASCAR racing program — winning a Sprint Cup title in the process — and now offer this technology across the PermaTorque MLS line. Without our OE business and the intelligence we gain through that business, we wouldn’t have been able to offer this new advantage to Fel-Pro customers.
The same dynamic can be seen across our other aftermarket brands. The exclusive technologies behind the success of Wagner ThermoQuiet brake pads were developed with the help of our OE engineering resources. And we will soon be introducing next-generation ThermoQuiet Ceramic brake pads featuring the most technologically advanced ceramic friction formulations available in the industry. Each pad is engineered to deliver all of the critical braking characteristics consumers demand. These technologies — and the corresponding insight into the braking requirements of today’s vehicles — are driven in part by our global OE friction resources and expertise.
